Gold prices slipped in Asian trading on Wednesday, retreating after touching a two-week high. The move followed U.S. President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook, which reignited concerns about the central bank’s independence.
Gold initially rallied after Trump announced late Monday that Cook should be dismissed over alleged mortgage fraud. The dollar weakened in response, lifting demand for precious metals. However, the greenback later recovered its losses, while Treasury yields stabilized as both Cook and the Fed argued that the president had no authority to fire her.
Spot gold fell 0.5% to $3,378.29 per ounce, while October gold futures slipped 0.1% to $3,428.70 by 00:23 ET (04:23 GMT).
Safe-haven demand amid Trump–Fed tensions
This week’s rally in gold was fueled by safe-haven demand as investors anticipated a legal showdown between Trump and Cook. Cook has vowed to challenge her dismissal in court, while the Fed reinforced that the president lacks the power to remove her.
Markets are uneasy about Trump’s repeated attempts to influence monetary policy, including earlier threats to fire Fed Chair Jerome Powell. Replacing Cook with his own nominee would give Trump more sway over the Fed’s seven-member rate-setting board, potentially enabling faster interest rate cuts.
While Fed Chair Powell has left the door open for a possible rate cut in September, he remains cautious given inflationary risks from Trump’s tariffs. Lower interest rates, however, generally support gold and other metals.
Dollar recovery pressures metals
The U.S. dollar index climbed back above 98 on Wednesday, erasing earlier losses, while Treasury yields steadied after recent volatility. This pressured precious and industrial metals.
Spot platinum dipped 0.1% to $1,353.71, while spot silver dropped 0.3% to $38.50. On the industrial side, benchmark copper futures in London eased 0.1% to $9,838.55 per ton, while COMEX copper fell 0.5% to $4.5248 per pound. Both had gained strongly last week on hopes for lower U.S. interest rates and fresh stimulus measures from China.
